Why I Won’t Be Signing Chip’s Petition

Chip Filson, the head of Callahan and Associates, is making a lot of noise lately. Not only is he suggesting that NCUA misused money generated when it wound down U.S. Central last October, he’s heading an internet drive to petition the White House to ensure that the next persons selected to fill the vacancies on the NCUA board are people who have an appreciation of the importance of the cooperative structure to the credit union movement. It is a nice sentiment, but it’s way down on my list of most important qualifications.

First, get me someone who understands the impact that government regulations have on small businesses. The single biggest problem that all business lobbyist have, irrespective of whom they represent, is to explain to elected representatives, many of whom have never held a private sector job, that seemingly small mandates have big impacts in the aggregate. For example, every new disclosure or record keeping requirement not only adds the direct expense of producing new forms and documents, but adds one more layer of complexity to compliance mandates.

Second, I want someone who understands the importance of competition in the financial sector and the role that credit unions can play in fostering it. Credit unions not only assist individuals of modest means by seeking to lend in underserved areas but they also help all consumers, irrespective of the size of their paycheck, by making sure that there is a cost-effective alternative to that bank down the street.

Third, I want someone who understands federalism. The NCUA Board has done a great job lately of reducing mandates where it has the power to do so. But its utter disregard of state level oversight of state chartered credit unions has the potential, left unchecked, of eliminating the dual charter in all but name. This is in no one’s interest.

Sure, it’s important that credit unions are financial cooperatives and it sure would be nice if whoever goes on the NCUA Board has an appreciation for the cooperative structure. But as an industry, we spend way too much time extolling our cooperative structure as if it is an end in itself, and way too little time pointing out that we are small businesses that are worth protecting in order to help consumers in the financial free market.